Chattanooga's housing market revives

Chattanooga's housing market revives

September 21st, 2012 by Ellis Smith in Business Around the Region

Teresa Groves

Teresa Groves

What: Fall tour of new homes

When: 11 a.m. to 4 p.m. on Saturday, Sept. 22, and 1 p.m. to 4 p.m. on Sunday, Sept. 23

Why: More than 50 new homes are on display at the same time this weekend.

Source: Homebuilders Association

Realtors and builders are throwing a party to mark the new blood that has returned to the formerly lifeless housing market.

After four years of hawking foreclosures, renovations and resales, real estate agents will open almost 50 new homes to the public in a coming-out celebration spearheaded by the Homebuilders Association of Greater Chattanooga.

"First, we had to get through the existing inventory," said Teresa Groves, head of the association. "Most of that is gone now, especially the price points of $180,000 to $300,000."

Gawkers and homebuyers alike can check out the city's entire inventory of new homes this weekend without making an appointment.

Realtors are expecting a crowd.

Rental rates have been at all time highs with occupancy in apartments and duplexes above 90 percent, according to news reports. Mortgage buyer Freddie Mac reported Thursday that mortgage rates this week fell to the lowest level on record.

Though it's a familiar refrain for housing market waters, interest rates are near an all-time low, making a home loan about as affordable as it's going to get, Groves said.

"People are ready to buy," she said.

Banks have been the key to the recent uptick in new home construction, said Grace Frank, principal of the Grace Frank group under RE/MAX Renaissance.

"Over the past 3 years the banks really tightened down on builders," Frank said. "I had one builder who did all their new construction with cash, because the banks were so strict and stringent."

That's changed now. As home inventory has dropped, banks have loosened up on construction loans for builders, she said. Frank herself is listing 13 new homes. The paint is still drying on some of them.

"Builders now have the ability to start new construction projects now where they've been limited in the past," Frank said. "I think the market is opening up."